In my previous post on Microsoft Surface I was attempting to highlight the reasons why Microsoft would deliberately apply pressure to its OEMs and hardware vendors around the world. Typically the internet meme went in an interesting direction, suggesting that Microsoft was in fact killing and alienating its partners with no though to its future viability. Here is an example:
Microsoft, what is wrong with you?
Summary: Microsoft’s new tablet not only fragments the Windows 8 mobile ecosystem, but also creates strife with its OEMs and will re-ignite negative perceptions of the company’s former monopolist position...
Why not give the OEMs access to the manufacturing technology for the special “VaporMG” casings and the keyboard cover? Why create such a potentially hostile situation by biting the hand of the companies that license your software which is currently your bread and butter income stream?
It would be true to say that the above example was born of a frustrated reporter, who felt robbed by the entire Surface announcement process, but this encapsulated the main internet theme. I actually concur with and understand the negative press that pointed out that no one was permitted to touch the hardware, and no prices were announced. This is surely the main reason why you invite reporters to get on a plane and physically attend an event!
OEMs were silently annoyed, but there is a part of me that knows they must have also seen this coming. Most of these companies were unable to figure out the fundamentals of a good Trackpad. Can you even remember the last PC based hardware innovation that really wowed you? Go ahead and Google it I'll wait... Do not worry I do not remember either. The focus has been on faster, cheaper and smaller, meanwhile our visceral experience has lagged behind the CPU. It has only been during the last six months that we have seen greater focus on more elegant, tactile design (see the line of MacBook Air impersonators). Lets take Dell hardware as the prime example. When the Inspiron Mini 10 was being revealed the most compelling thing about the hardware was that it came in 7 different colors! Awful keyboard, monitor and Trackpad, but hey you can get it in Passion Purple!
In this new world Microsoft is not the only major software vendor, and in terms of an install base I would remiss in not inviting the incredibly successful Android OS to the party. For good or for ill its influence is massive and only has the potential to get larger mostly due to the way it is allowed to fragment itself on multiple axis. Each OEM has the ability to take the software in any direction it sees fit for as long as it cares to. The recent revelation of the Nexus 7 only serves to increase that fragmentation but counter to my argument for hardware vendors in Microsoft's case, I believe Google has a quite different intentions towards Android licensees.
According to Google the price of the Nexus 7 (built by Asus) will be $199. This is not considered a high end device and it was revealed that the the device is powered by a quad-core Tegra 3 processor and comes with either 8GB or 16GB of internal storage and only 1GB of RAM so this puts it in direct conflict with, well, everyone.
- Relatively cheap eReaders from B&N and Amazon (although they are more interested in selling books than hardware).
- People who do not want to spend double for an iPad (most of us).
- Oh, and every other OEM including Google's own Motorola division (strange they did not make the hardware).
Google's claim that there is plenty of room for Android innovation rings hollow because, at this point, innovation does not appear to be the central concern of the OEMs. What they are concerned with is squeezing out razor thin profits based on high volume hardware sales. So when Google produces a device 'at cost', you effectively suck the oxygen from the low end of the market? Google is fine with this model because it anticipates that it can make money back with its various services (see Search). In turn Google is compelling its OEMs to go and compete with the iPad (good luck with that) and other ultra portable devices. Personally, I do not think that is a fair fight.
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